Assuming these percentages remain valid over a long period of time, what is each company's expected market share in the long run?  Consumers in a certain state can choose between three...

Assuming these percentages remain valid over a long period of time, what is each company's expected market share in the long run?

 

Consumers in a certain state can choose between three long-distance telephone services: GTT, NCJ, and Dash. Aggressive marketing by all three companies results in continual shift of customers among the three services. Each year, GTT loses 10% of its customers to NCJ and 5% to Dash, NCJ loses 10% of its customers to GTT and 20% to Dash, and Dash loses 20% of its customers to GTT and 20% to NCJ.

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justaguide | College Teacher | (Level 2) Distinguished Educator

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The percentage of customers each company loses to the others is given. Each year, GTT loses 10% of its customers to NCJ and 5% to Dash, NCJ loses 10% of its customers to GTT and 20% to Dash and Dash loses 20% of its customers to GTT and 20% to NCJ.

As Dash loses 20% of its customers to NCJ and NCJ loses 20% of its customers to Dash, there is no net change in market share due to this.

GTT loses 10% of its customers to NCJ and NCJ loses 10% of its customers to GTT, again there is no change in market share due to this.

The only change is due to GTT losing only 5% of its customers to Dash but Dash losing 20% of its customers to GTT. GTT thus acquires 15% of Dash's market share every year.

This would mean that after a long period of time Dash will lose all its market share to GTT.

The final market of share of NCJ and GTT cannot be determined without the initial market share.

After a long period of time Dash loses all market share to GTT and GTT and NCJ remain the only operators in the market.

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